TAKING STOCK: Glencore must know Qatar's shopping list does not end at BAA

For a very small country, Qatar is becoming a very big player in the British economy.

Its sovereign wealth fund, Qatar Holding, has just bought 20 per cent of Heathrow’s owner BAA for £900million. Useful, no doubt, for when the gas-rich Qataris fly in to check their investments at Harrods, which they bought for £1.5billion.

They might then like to visit a branch of Barclays, which they saved from State-aid by buying a £7 billion stake in the bank in 2009. And they could stop for a ready-meal at Sainsbury’s, of which they own 26 per cent.

Deal: Glencore investors will be expecting an update on the Xstrata merger on Tuesday when the company reports its first-half results

Qatar has no problem checking the
value of its investments, since it owns 20 per cent of the London Stock
Exchange. And the stock exchange can in turn be surveyed from London’s
Shard, Europe’s tallest building, of which Qatar owns 95 per cent.

In
its latest purchase, Qatar bought most of its stake in BAA from Spain’s
Ferrovial, BAA’s parent group. Ferrovial’s stake will stand at less
than 40 per cent after the deal.

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But
the Qataris are not stopping there. They are playing hardball over the
planned £50billion merger of commodities trader Glencore and mining
group Xstrata. That could come to a head this week.

On Tuesday, when Glencore reports its first-half results, investors are expecting an update on the controversial merger.

Qatar
Holding has been steadily building its stake in Xstrata and has nearly
12 per cent, acquired at a cost of about £2 billion. This makes it the
second biggest investor behind Glencore’s 34 per cent.

For the deal to go ahead, Glencore needs the approval of 75 per cent of Xstrata shareholders, excluding its own holding.

So
just 16.5 per cent of Xstrata investors could block the deal when they
vote on it next month, and that puts the Qataris in the driving seat.

Glencore
has offered 2.8 of its own shares to Xstrata shareholders for every
share they hold in the miner, but Qatar Holding’s chief executive Ahmad
Al-Sayed has said that Glencore’s offer undervalues the firm.

The
Qataris are holding out for 3.25 shares. Ivan Glasenberg, Glencore’s
chief executive, has been talking to Al-Sayed to get him to see things
from his point of view.

Though
Glencore’s profits are likely to have fallen to $1.5billion, that 37
per cent drop is less than Xstrata’s in the wake of a fall in commodity
prices. And it is likely that Glencore’s level of debt will have dropped
to $26.5billion too.

That
is not much of a fall – it was $26.7billion last time – but may be
enough to persuade investors that it can afford to buy Xstrata without
being unduly stretched.

The
Qataris remain to be convinced and, as they have demonstrated over and
over again, they are very comfortable playing for big stakes.